El Corte Inglés, one of Spain’s largest retail giants, has announced positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in the second quarter of this year, despite the challenges posed by the ongoing pandemic. From June to August, the company achieved 64 million euros in EBITDA, a significant improvement compared to the same period last year which saw 264 million euros. This success can be attributed to the reopening of stores and a boost in online sales.

However, the company did experience a decline in overall turnover, with a 30% decrease to 2.82 billion euros. Gross profit also declined by 26.9%, reaching a total of 811 million euros. Retail sales remained stable over the last three months, amounting to 2.84 billion euros, a 12.9% decrease compared to the previous year. This decline can be primarily attributed to the reduced influx of national and international tourists due to the pandemic.

El Corte Inglés acknowledged that its travel division, Viajes El Corte Inglés, was significantly impacted by the pandemic, experiencing a reduction of over 90% in revenues. This made it the hardest-hit business segment within the company.

Despite these challenges, El Corte Inglés reported a quarter-over-quarter increase of 170 basis points in its sales margin, reaching 26.7%. The company’s cash flow generation from June to August was 679 million euros, thanks to increased sales, cost savings, effective purchase management, and other implemented measures.

In response to the ongoing pandemic, El Corte Inglés recently announced the implementation of ERTE furloughs in certain regions of Spain. This measure will impact employees in establishments affected by the latest round of Covid-19-related restrictions, excluding supermarkets and stores selling essential products. The furloughs will affect staff in Catalonia, Asturias, and Castille and León for a period of two weeks. Viajes El Corte Inglés will continue to be impacted by ERTE furloughs, affecting a total of 4,718 employees. The company plans to maintain this measure until August 31st of next year and has committed to retaining affected employees until February 2022.

Looking towards the future, El Corte Inglés remains confident as it enters the second half of the fiscal year, particularly with the upcoming Christmas campaign, which contributes significantly to the company’s annual revenue. The retailer is also focused on diversifying its business, as demonstrated by the creation of Sicor, a new company dedicated to security services. Additionally, El Corte Inglés is prioritizing digital development and efforts to become more socially responsible.

Useful links:
El Corte Inglés Official Website
Viajes El Corte Inglés Official Website